India's Economic Resilience Shines Through Global Challenges

NEW DELHI: Despite facing geopolitical tensions and trade policy uncertainties, the Indian economy is projected to grow at a robust 6.5% in the current financial year, according to S Mahendra Dev, chairman of the Economic Advisory Council to the Prime Minister (EAC-PM).

Dev highlighted that domestic growth drivers include low inflation, thanks to a good monsoon season, and a benign interest rate regime following three consecutive rate cuts by the Reserve Bank of India (RBI).

Global Headwinds Cannot Dampen India's Growth

"The Indian economy remains resilient and continues to be the fastest-growing among large economies," Dev stated, acknowledging the challenges posed by global headwinds.

High-frequency indicators for the first two months of 2025-26 suggest a strong performance by the domestic economy, with Dev expressing confidence in achieving the 6.5% GDP growth target for FY26.

Government and Private Sector Contributions

Dev also pointed out the positive impact of rising government capital expenditure on growth, alongside a healthy expansion in private consumption. Despite the optimistic outlook, international bodies like the IMF and the World Bank have adjusted their growth projections for India downwards to 6.2% and 6.3%, respectively, citing global uncertainties.